In the shifting tides of global commerce, even the most carefully drawn promises sometimes require renegotiation. New Zealand's Overseas Investment Office has granted American billionaire William Foley's wine business permission to lower its export commitments at the Mt Difficulty vineyard in Central Otago, recognising that forces beyond any single company's reach — pandemic-altered tourism, trade tariffs, and a contracting global wine market — had rendered the original targets unrealistic. The decision reflects a broader truth about foreign investment in sensitive land: that accountability mu
Foley Wines gets export target cuts approved amid market downturn
Market conditions beyond control had made the original plan unfeasible
Mark
So Foley Wines got permission to cut its export targets by half a million dollars in one year and two million in another. That sounds like a significant retreat. What drove that?
Mimi
The company faced a perfect storm—the global wine market contracted, tourism to Central Otago fell 20 percent, and the US imposed 10 percent tariffs. For a company where 35 percent of exports go to North America, that tariff hit hard.
Luke
But we should be careful here. The company says these conditions were "beyond its control." That's true for tariffs and global markets. But tourism being down—was that really unforeseeable when they made their original commitment?
Mimi
Fair point. The company also cited local competition and labour shortages, which are real pressures in the region. But you're right that some of this was predictable.
Mark
The company also scaled back from a full dinner service to lunch only. Why would that be commercially unviable?
Mimi
They argued that with fewer tourists and locals cutting spending, a dinner service couldn't draw enough customers to cover costs. They pointed to increased competition from other cellar doors and restaurants nearby.
Luke
Again, though—did they not anticipate that competition when they planned the original development? The approval documents don't really explain whether this was a surprise or just a miscalculation.
Mark
What about the investment the company did make elsewhere? The $13.8 million at Te Kairanga?
Mimi
That was their leverage. They showed the Overseas Investment Office that they'd spent more than $8 million above what was required, created jobs, and lifted overall exports. They essentially said, "We're still investing heavily in New Zealand, just not in the way we originally planned."
Luke
And the regulator accepted that. But the question underneath is whether a company should be able to renegotiate the terms of foreign investment approval just because market conditions changed. That's a policy question the reporting doesn't really explore.
Mark
What's the timeline now?
Mimi
June 2028. They have to get all consents and complete the redevelopment by then, or they have to sell the land. The CEO says they're committed and will make it.
Luke
He would say that. We don't know yet whether they'll actually meet it.
Der Puls
- Export targets that once seemed ambitious have been quietly reduced — from $5 million to $3 million by 2025 — as the global wine market contracts and trade barriers rise.
- A 20 percent drop in international tourism to Queenstown and US tariffs threatening 35 percent of North American revenue have placed Foley Wines under compounding commercial pressure.
- Plans for a full cellar door and restaurant at Mt Difficulty have been scaled back to lunch service only, as the economics of a dinner operation no longer hold up.
- Foley Wines made its case partly by pointing to $13.8 million spent redeveloping its Martinborough facility — well above what was required — demonstrating broader commitment to New Zealand.
- A hard deadline of June 2028 now governs the Mt Difficulty redevelopment, with land disposal the consequence of failure, though the company's CEO says exports are already trending upward.
In the shifting tides of global commerce, even the most carefully drawn promises sometimes require renegotiation. New Zealand's Overseas Investment Office has granted American billionaire William Foley's wine business permission to lower its export commitments at the Mt Difficulty vineyard in Central Otago, recognising that forces beyond any single company's reach — pandemic-altered tourism, trade tariffs, and a contracting global wine market — had rendered the original targets unrealistic. The decision reflects a broader truth about foreign investment in sensitive land: that accountability must be balanced against the unpredictability of the world into which capital is placed.
William Foley, the American billionaire behind Auckland FC and AFC Bournemouth, has secured approval from New Zealand's Overseas Investment Office to ease the export obligations attached to his Mt Difficulty vineyard in Central Otago. The decision, granted in July of last year, reset export targets from $4 million to $3.5 million for 2023 and from $5 million to $3 million for 2025, while also allowing the company to scale back its planned cellar door and restaurant to lunch service only, five days a week.
The company argued the original commitments had been overtaken by circumstances outside its control. International tourism to the Queenstown region had fallen 20 percent from pre-pandemic levels, domestic visitors were constrained by cost-of-living pressures, new competitors had entered the market, and labour costs remained high. A 10 percent US tariff on imported wine added further strain, given that roughly 35 percent of Foley Wines' export revenue flows from North America.
To strengthen its case, Foley Wines pointed to $13.8 million invested in redeveloping its Run Holder facility in Martinborough — more than $8 million beyond what its original consent required — arguing that this spending had lifted overall exports and created employment. The Overseas Investment Office accepted the reasoning, concluding that the revised targets were reasonable and that the investment still delivered a substantial benefit to New Zealand.
Foley Wines must now complete the Mt Difficulty redevelopment by June 2028 or face an obligation to sell the land. CEO Mike Higgins told the Herald the company remains committed to the deadline, noting that wine tourism in the region is recovering, dinner service is planned for the coming summer, and export sales — particularly into Asia, Britain, and the United States — are trending stronger this year.
William Foley, the American billionaire who owns Auckland FC and AFC Bournemouth, has won permission to ease the export obligations tied to his New Zealand wine business. In July of last year, the Overseas Investment Office approved Foley Wines' request to lower the export targets imposed on its Mt Difficulty vineyard in Central Otago, acknowledging that global market forces had made the original commitments unrealistic.
The company had promised to generate $4 million in exports by September 2023 and $5 million by September 2025. Those figures have now been reset to $3.5 million and $3 million respectively. Foley Wines also won approval to shelve plans for a cellar door and restaurant complex at Mt Difficulty, scaling back to lunch service only, five days a week. The company argued that a full dinner operation was no longer economically defensible given the conditions it faced.
The market had shifted in ways the company said were beyond its control. International tourism to the Queenstown region—a crucial customer base for the vineyard—had dropped 20 percent from pre-pandemic levels. Domestic visitors were also scarce, squeezed by the cost-of-living crisis. Meanwhile, new competitors had opened around the region, and labour costs remained stubbornly high. The global wine market itself had contracted, and the United States imposed 10 percent tariffs on imported wine. Since roughly 35 percent of Foley Wines' export sales flow to North America, that tariff wall posed a direct threat to revenue.
Foley Wines made its case to the Overseas Investment Office by pointing to investment elsewhere in its portfolio. The company had spent $13.8 million redeveloping its Run Holder facility at Te Kairanga vineyard in Martinborough—more than $8 million above what its original consent required. That capital injection had lifted overall exports and created jobs. The company argued that without the prestige of the Mt Difficulty brand and the expanded capacity at Run Holder, it would not have achieved its current export performance at all.
The Overseas Investment Office accepted these arguments. Officials determined that market conditions genuinely outside the company's control had made the cellar door and restaurant plan unfeasible. They found the revised export target of $3.5 million reasonable given the company's performance across the rest of New Zealand. Critically, they concluded that the changes did not undermine the core test for approval—that the investment deliver a substantial and identifiable benefit to New Zealand. The company's total capital spending, they noted, had significantly exceeded what was required.
Foley Wines now has until June 2028 to secure all necessary consents and complete the Mt Difficulty redevelopment. If the company fails to meet the new conditions, it faces an obligation to sell the land. Mike Higgins, the company's chief executive, told the Herald that Foley Wines remains committed to the project and will meet the 2028 deadline. He said wine tourism in the Queenstown region was already recovering, and the winery planned to launch dinner services this coming summer. Exports had been weak last year, he added, but were trending stronger this year, with solid sales into Asia, Britain, and the United States.
Bemerkenswerte Zitate
Current export numbers of Foley Wines would not have been achieved if the consent holder did not have the prestige brand of Mt Difficulty, or if the Run Holder was not developed to increase capacity.— Foley Wines submission to Overseas Investment Office
The company is committed to the Mt Difficulty redevelopment and will complete it within the 2028 timeline. Wine tourism in the Queenstown region was already picking up and the winery planned to begin dinner services this summer.— Mike Higgins, CEO of Foley Wines
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